Transcript EPS RICE Rule update DSWG

Impact of EPA RICE Rule on
ERCOT Demand Response
Programs
Presented to: Demand Side Working Group
August 20, 2015
Disclaimer
• This presentation and its contents are provided for informational
purposes only. The application and impact of laws can vary
widely based on the specific facts involved.
• This information is based on publicly available information and
is not advice or a recommendation regarding the matters
described or any related commercial transactions. You should
not place undue reliance on this information.
• ERCOT is not responsible for any inaccuracies or omissions in
the information contained herein or for any results obtained or
decisions or actions taken from the use of this information.
• ERCOT makes no representations or warranties, express or
implied, regarding the accuracy, adequacy, reasonableness,
fitness, or completeness of the information or analysis
contained herein and accepts no liability associated therewith.
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History Of RICE NESHAP Final Rules
• 2004 NESHAP allowed back up generators to operate w/o emissions
controls for:
– Unlimited periods in emergency situations and routine testing/maintenance
– An additional 50 hours/year in non-emergency situations
 No income can be generated supplying power to an electric grid or through a
financial arrangement with another entity
• 2010 NESHAP allowed back up generators to operate w/o emissions
controls for 15 hours/year as part of “demand response programs” during
“emergency conditions that could lead to a potential electrical blackout”
• 2013 NESHAP allowed back up generators to operate w/o emissions
controls:
– Up to 100 hours/year for “emergency demand response” defined as
 During “Reliability Coordinator” declared an EEA Level 2 events
 During voltage or frequency deviation >5% below standard
– During actual emergency situations and maintenance
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History of Legal Challenges
• 2010 NESHAP subject to petitions for reconsideration/legal
challenges
• 2013 NESHAP was developed and finalized in response
– Petitions for reconsideration and, ultimately, legal challenges ensued
• On May 1, 2015 U.S. Court of Appeals for the District of Columbia
Circuit ruled on the legal challenges
– Reversed/Remanded 100 hour exemption in 2013 NESHAP/
Performance Standards
• In July 2015, EPA filed a Motion For Voluntary Remand, a Motion
to Stay the Mandate, and a Motion For Rehearing
– Motion for Rehearing addressed maintenance and readiness testing
 Motion was granted; May 1, 2015 Order and Opinion revised
– No ruling yet on Stay or Remand Requests
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What Rules Are Effective Right Now?
• Following rehearing, maintenance/readiness exemptions remain
effective
• Mandate is not effective until ruling on Stay Request is issued
• If mandate becomes effective, rules are reverted to previous
versions:
– RICE subject to MACT reverted to 15 hour/year exemption as part of
“demand response programs” during “emergency conditions that
could lead to a potential electrical blackout.”
• Unless they do not meet the criteria for emergency engines
– RICE subject to NSPS have no exemptions for participation in
“demand response programs”
– Mandate did not impact operation in emergency situations or for 50
hours/year in non-emergency situations
 No income can be generated supplying power to an electric grid or
through a financial arrangement with another entity
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